On the Kowloon side, MTR Corp., which operates the rail system and owns 13 shopping malls throughout the city, began its most ambitious project to date — Elements, a 1 million-square-foot shopping mall in a previously undeveloped district. It opened, naturally enough, on China's National Day holiday last October. Not surprisingly, considering its connection to the transportation system, it has its own subway stop as well as serving as a cross-border bus terminal.
"We have been quite blessed," said Betty Leong, chief retail development manager for MTR Property Management. "We opened with a bit of a surprise and ever since traffic has been above average. It's beyond our expectations."
Elements, which opened with 100 percent occupancy, is home to new brands for Hong Kong, including Karen Millen and Luella. Leong stressed that while weekend and holiday traffic at Elements is high, weekday numbers are only a fraction of what they will reach when the adjacent W and Ritz-Carlton hotels and the ICC office tower finish construction. "I would say that if we opened 30 percent above expectations [without those], we expect to be another 30 percent up with all of those coming into play by the end of the third quarter this year."
She is not alone in big expectations. Although Husband estimates rents in the city's top malls run a whopping 300 to 400 Hong Kong dollars per square foot a month — which converts to roughly $450 to $600 per square foot per year, at current exchange — there is still fierce competition to acquire space, and neighborhoods are expanding.
While the rapid expansion of international brands and introduction of megaflagships was welcomed by Mainland shoppers, the trend has not been great for everyone.
"Loyalty is nothing if there is a newcomer — you really have to have a good relationship with the landlord and even then you might be told to try another mall. The competition is getting tougher and tougher," Chan said.
But Husband is not worried. "This is like any other city, evolving and growing. Instead of having just downtown Hong Kong and TST [Tsim Sha Tsui], there will be three, four or five interesting new retail destinations," he said.